Oct 6, 2026 earnings call — Raised full-year outlook and North America momentum
Company raised fiscal 2027 adjusted EBITDA guidance to $1.125 billion to $1.215 billion.
Revenue $1.7B (est $1.7B) · EPS $0.75 (est $0.59)
Key quotes
"We grew volume for the seventh consecutive quarter in North America and are exceeding end market growth."
"Potatoes will be the limiter in the industry this year, and we expect not all open industry capacity will be used."
"We launched an enterprise-wide zero-based budgeting process that is analyzing spending across the organization."
Analyst Q&A 7
North America volume outlook
Q (Peter Galbo · BofA): The analyst asked what drives the stronger-than-expected North America volumes and whether that performance is sustainable. He also asked for an update on inflation expectations for the year.
A: Management said North America strength comes from favorable customer mix, Focus to Win efforts, better fill rates, joint business planning, new wins and cost savings. They said ZBB and org changes will lower operating costs and improve manufacturing efficiency. They added non-potato input inflation is about 100 basis points higher and they will offset inflation with cost savings and pricing.
"When I think about our North America business, I'm really happy with our performance." — Mike Smith (CEO)
North America pricing and mix outlook
Q (Thomas Palmer · JPMorgan): The analyst asked how pricing expectations in North America have changed for the year and how price/mix will shake out versus prior guidance. He also asked whether competitor behavior in Europe is changing and if that is already in the outlook.
A: Management said contract negotiations are about 70% complete and spring '26 list increases have been taken for noncontracted customers. They expect sequential price/mix improvement the rest of the year and said half of the mix effect is price and half is product mix. On Europe, they said poor potato yields and announced closures are tightening capacity and that pricing actions leave international net sales closer to flat.
"And so as you saw in our price mix, we have made some sequential improvements quarter-over-quarter." — Mike Smith (CEO)
How you pick growing customers
Q (Alexia Howard · Bernstein): The analyst asked how Lamb Weston identifies customers that will grow faster in the current environment. She also asked whether competitors might react to Lamb Weston's strong volume growth and what defends the company.
A: Management said they use analytics, look at customers who have grown over several years, and use Focus to Win with joint business planning and improved fill rates to identify and support winners. They said innovation and closer customer relationships create stickiness and defend against competitor reactions, and LTOs and product innovation drive both volume and margin. They also noted a favorable mix with QSR chicken customers.
"We also look at customers that have grown over the past several years and try and triangulate to who we believe the winners will be in the future." — Mike Smith (CEO)
International strategy and ZBB guardrails
Q (Max Andrew Gumport · BNP Paribas): The analyst asked for an update on the international where-to-play and how-to-win work and whether that could lead to partnerships or divestitures. He also asked what guardrails exist for the new ZBB effort to avoid cutting too much.
A: Management said the where-to-play work is done and the how-to-win work is creating country clusters, playbooks and owner missions that could lead to partnerships or divestitures; more detail will come at Investor Day in early 2027. On ZBB, they said it is meant to build owner mindset, drive out costs, and also reinvest savings into innovation and commercial teams rather than only cutting costs.
"So at this stage, we have completed the where to play work, and we're in the middle of the how to win, which is actually quite exciting because that work leads us to a set of country clusters." — Jan Eli B. Craps (CHAIR)
Free cash flow guidance unchanged
Q (Robert Moskow · TD Cowen): The analyst asked why free cash flow guidance stayed the same even though other metrics were raised.
A: Management said higher raw material costs are rolling into finished goods and that affects inventory levels and the change in inventory value, which explains why free cash flow guidance was not raised. They indicated inventory effects are the main reason.
"Just a little bit of raw material also then rolling into our finished goods. And so just thinking about how that's going to play out necessarily on inventory and change in inventory value." — James Gray (CFO)
European potato sourcing and APAC simplification
Q (Pooran Sharma · Stephens): The analyst asked how European procurement is faring given the tighter crop and how much more open-market buying is needed. He also asked whether APAC simplification is more about cost savings or better execution.
A: Management said European yields and quality were hit by heat waves, reducing tonnage about 15% to 20%, but they expect to have sufficient contracted price potato supply and a smaller open portion than typical. They took pricing increases in Europe and will adjust specs to stretch raw. On APAC simplification, they said the focus is improving agility and execution, reducing management layers, and that cost benefits exist but they will not disclose specific figures.
"I think as we think about processes that we've put in place around better forecasting and tools that we have, we anticipate that we have sufficient supply of contracted price potatoes on our business." — Mike Smith (CEO)
EMEA capacity and demand trends
Q (Marc Torrente · Wells Fargo): The analyst asked what is needed to return EMEA utilization toward 90%, any further actions and the timeline. He also asked about recent restaurant traffic trends in the U.S. and Europe and what was factored into guidance.
A: Management said poor potato yields and announced plant closures are tightening capacity, and they are focusing on customer partnerships, plant efficiency work (pinch point analyses and throughput) and innovation to improve utilization. They said these actions and consolidation should raise utilization toward the low 90s and that fries remain the most ordered restaurant item with elevated attachment rates. They noted Europe QSR traffic was down about 1% in several countries and Spain was flat.
"We've done a lot of work in our international plants in order to be more efficient, whether that's pinch point analyses or throughput work to make sure that we improve in those areas." — Mike Smith (CEO)